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Table Of Contents The Importance and Challenges of the Contingent Workforce 3 Keys to Effective Contingent Workforce Management 5 Next Steps 8 PeopleFluent, the PeopleFluent logo, Mirror and Colossus are among the trademarks of PeopleFluent. 2
1 The Importance and Challenges of the Contingent Workforce In the midst of sustained economic uncertainty, the contingent workforce continues to be among the fastest growing workforce segments with a projected increase of 23 percent through 2020, or an additional 631,300 jobs, to reach a total of 3.3 million. 1 Employing contingent labor offers significant business advantages: reduced overhead costs, greater access to specialized skills, and flexibility to meet business demands. The ability and impact of this workforce to meet the ongoing talent shortage for high-demand labor cannot be understated. However, managing the contingent workforce is complicated from a process, technology and development perspective. To do so demands adherence to constantly evolving domestic and international compliance and regulatory requirements, along with total visibility to effectively evaluate labor sources, determine what talent is required, and better control cost. Employing contingent labor offers significant business advantages. 23% Predicted Growth in Contingent Labor 2010 2020 Source: U.S. Department of Labor 3 3
The Importance and Challenges of the Contingent Workforce Contract or temporary labor represents significant spend some large companies estimate that up to 30 percent of their procurement spend goes toward contingent workers 2 - yet many organizations still rely on manual processes or disparate systems for managing this workforce, thereby taking resources away from value-added pursuits. With contingent labor playing a growing role in how work gets done, organizations require better overall processes, systems and reporting to better manage and truly understand the impact of contingent workers. Organizations that put the right systems and best practices in place can optimize their contingent services spend and procurement methodologies, resulting in the right talent at the right cost to meet their business goals. Some large companies estimate that up to 30% of their procurement spend goes toward contingent workers. 1 U.S. Department of Labor, Bureau of Labor Statistics, Employment Outlook: 2010-2020, Monthly Labor Review, Jan. 2012, www.bls.gov/opub/mlr/2012/01/mlr201201.pdf 2 Global Business Driven HR Transformation: The Journey Continues, Deloitte, 2011 4 4
2 Keys to Effective Contingent Workforce Management To effectively manage and optimize the contingent workforce, organizations must invest in a vendor management system (VMS) as a starting point to control spend, increase efficiencies, better manage compliance and risk, and improve the quality and performance of contingent labor. A VMS automates the many hiring, onboarding, and payment processes involved with managing non-permanent labor. In addition to improved efficiency, a VMS provides true visibility into this specialized workforce. With the right solution in place, especially in a regulatory rich environment, organizations can streamline the entire process from initial requisition to off-boarding of contract workers and improve the way talent is sourced. A VMS provides true visibility into this specialized workforce Following are four key ways a VMS can help organizations more effectively manage the contingent workforce. Compliance management to mitigate risk Efficiency and control to maximize cost savings Total talent visibility Data integration to drive strategy 5 5
Keys to Effective Contingent Workforce Management Compliance Management to Mitigate Risk Managing the flexible workforce, especially on a global scale, requires navigating evolving regulations, stringent compliance requirements and varying sourcing strategies that can include multiple agencies or direct sourcing, as well as tracking the fulfillment of requirements. In the case of the contingent worker, it is difficult to track onboarding and off-boarding activities, such as ensuring new hires have completed a background screening, onsite workers have required certifications and adherence to regulations such as the EU Temporary and Agency Workers Directive, or tracking if a worker turned in the security badge at the end of their engagement. A VMS provides a full audit trail of documentation to demonstrate global compliance. A robust VMS = compliance management, cost savings, & total talent visibility Efficiency and Control to Maximize Cost Savings As organizations seek to increase efficiencies in contingent labor management programs, an end-to-end approach offers measurable improvement and helps organizations achieve maximum value from their technology investment. A VMS provides visibility and control through automation and best practices. Organizations can perform market rate rationalization and take advantage of optimization opportunities based on statistical data. Rather than using manual processes to generate rate cards, organizations can set market rates for specific job descriptions based on vendor guidelines or not-toexceed rates to assist with spend management. Because the entire process is automated from initial requisition to off-boarding, the cost and complexity associated with timeintensive administrative activities is reduced and enables HR and procurement resources to focus on more strategic initiatives. 6 6
Keys to Effective Contingent Workforce Management Total Talent Visibility A focus on improving the effectiveness of contingent labor management programs requires a holistic view of the workforce and strategies for optimizing spend. Historically, there has been a functional and strategic disconnect in how temporary and permanent workers are managed, with HR responsible for the permanent workforce and contingent labor under procurement s domain. Procurement and HR need deeper insight into costs and productivity by project, team, department, location and more to make decisions that drive profitability. Data Integration to Drive Strategy A robust VMS provides the analytics needed for more informed decisions, risk management and strategic spending. Moving to a solution that integrates information about permanent and contingent workforces provides visibility into total talent and allows organizations to more effectively source talent, redeploy skill sets upon project completion, control costs and manage a blended workforce to meet business requirements. With a cohesive approach, organizations gain access to detailed information about the workforce to determine the best labor type for a particular role (permanent or contingent) and execute the right sourcing strategy to procure the best talent at the right cost. Procurement and HR need deeper insight to make decisions that drive profitability. As the contingent workforce gains a more permanent place in how work gets done, organizations that continue to rely on disparate systems and processes for managing the traditional and flexible workforce will realize increased costs, exposure to risk and missed opportunities for competitive advantage. A system that offers a streamlined, collaborative approach and more robust analytics can help organizations gain a more comprehensive view of available talent and better manage its total workforce. 7 7
3 Next Steps PeopleFluent s Vendor Management System (VMS) provides visibility into the extended workforce, allowing organizations to better manage spend, compliance, risk, and efficiency. By improving operational efficiencies, cost controls, compliance, and invoice controls for staff augmentation and professional services spend, PeopleFluent VMS enables you to leverage the contingent and services procurement workforce as a strategic component of your overall human capital management strategy. Leverage the contingent workforce as a strategic component of your overall human capital management strategy. 8 8
Visit our website to learn more about our Vendor Management System or give us a call at (877) 879-8807. We d love to hear from you. Don t stop learning now! Download our white paper Your Hidden Talent Pool: Tapping Your Contingency Workforce PeopleFluent, the PeopleFluent logo, Mirror and Colossus are among the trademarks of PeopleFluent. 9
About PeopleFluent PeopleFluent, the leading total workforce HCM technology company, redefines Talent Management with an innovative Talent Engagement Cloud that is built around people and not HR processes. By deeply integrating pervasive video, strategic analytics and collaborative social technologies into its complete suite of Talent Management applications, PeopleFluent redefines employee engagement to address productivity loss and diminished financial results due to an increasingly disengaged workforce. With PeopleFluent, companies can change at the speed of business without costly IT interventions through intuitive, highly configurable software that is built upon the right data. Spanning across an organization s entire global workforce with one talent cloud, PeopleFluent equips leaders with the meaningful talent data and strategic analytics necessary to make better business decisions. PeopleFluent has worked with over 5,100 organizations in 214 countries and territories to engage employees to drive better business results. Today, 80% of the Fortune 100 relies on PeopleFluent as part of their talent management delivery strategy, helping them successfully achieve their talent aspirations. Waltham, Massachusetts 300 Fifth Avenue Waltham, MA 02451 USA Tel: +1-781-530-2000 Raleigh, North Carolina 434 Fayetteville Street, 9th Floor Raleigh, NC 27601 USA Toll-Free: (877) 820-4400 Tel: +1-919-645-2800 London, United Kingdom 15 Fetter Lane London EC4A 1BW United Kingdom Tel: +44 (0) 20 7832 3440 PeopleFluent, the PeopleFluent logo, Mirror and Colossus are among the trademarks of PeopleFluent.